What was your observation and desire when you created Chronext in 2013?
At the time I was working for the Boston Consulting Group in a team that was working on the fusion of two Swiss power companies, Axpo and ISG, I was also very interested in commodities and I read the book "King of oil" about Marc Rich who invented the spot oil market, which inspired me a lot. At the time, the Seven Sisters cartel controlled 95% of the oil reserves with long-term contracts, and only 5% was traded on the spot market, before Marc Rich created the oil exchange. At the same time I was passionate about watches. With my friend and co-founder of Chronext Ludwig Wurlitzer we noticed that in the watch industry there was a kind of correlation with this situation, with brands producing watches that were sold to distributors and then to retailers and then to final customers, with the internet acting as a spot market, a stock exchange. And that's where we wanted to create the watch exchange, Chronext. In Chronext, EXT stands for Exchange Trading (like the stock exchange). Our vision was to create the coolest and most reliable place to trade watches. For most people who own watches, they are their most valuable assets after their houses and cars. It all started from that and our passion.
How is Chronext differentiate from other online sales platforms?
Chronext distinguishes itself by being the only site to have its own stock of watches, new and certified used. In addition Chronext plays the phygital card, with already 14 lounges such as the one we just opened in Paris. What is fundamentally different is that all the watches we sell are checked and serviced by us, whether they come from a brand, a retailer or an individual. We also take care of after-sales service, certificates, logistics, payments, and of course authentication, thanks to a team of 30 watchmakers. All the watches we sell go through a 17-step control process. Each watch is analyzed by three different watchmakers to make sure it is authentic and of impeccable quality. This goes far beyond the other players who only initiate the sale, and that's why Chronext is growing. Last year we passed the milestone of 100 million Euros in watch sales, increasing by more than a third in 2022, and we will have more than 200 employees. Finally we are a Swiss company.
What does Switzerland represents for you?
Chronext is based in Switzerland and I live there. When we started, we thought it would be a plus for American or Japanese customers to see us in Switzerland, the country of the watch par excellence. It was important for us to be a Swiss company, to be close to the brands. We have a lounge in Zug and are looking for one in Geneva. Just as it is important for us to be close to our customers, to understand the markets, and to open our lounges to get closer to them.
More than 120,000 people have already bought a watch from you, do you have very loyal customers?
Absolutely. 30% of our customers buy another watch within thirty-six months, and our 2% of customers account for 15% of sales . They keep coming back because once you know such an easy way to buy and sell watches, you use it! If you have a Speedmaster for example, it is very easy to trade it on Chronext or to get cash. There is more interaction than in a store where you go in and don't come back.
Do you consider your experience as a collector to be an asset to better serve your clients?
Absolutely. We didn't enter this market because of its huge potential and low digitalization, but as two friends who were studying in their kitchen and loved watches! This influences many of our actions, we think like our customers because we are our customers. We are among the most loyal: every year I buy and sell watches on the site. This changes everything in our approach, because fundamentally we are passionate about watches. This is reflected in our lounges, because it's not only about selling watches online, but also about meeting other enthusiasts. You show me your Submariner, I show you my Datejust, like in a community, that's what makes us fundamentally different from a simple business. We love what we do and it changes the whole experience.
You just opened your lounge in Paris, why?
Chronext already has 14 lounges in Europe, and it's been a year now that we are seriously dealing with the French market. So we analyze where the traffic comes from, where our customers are based, and logically in France they are mostly located in Paris. So that's the first place to open a lounge, but it will be followed by Lyon and Marseille because France is developing very well, so we're not ruling out opening one in Bordeaux or Cannes. When we observe a concentration of online customers within a 100km radius, we try to have a physical presence in order to meet them.
What are you the most proud of regarding your CPO offer?
I think what we do particularly well is to offer very rare watches available immediately. For example a Nautilus 5712 from Patek Philippe, no chance to get it in a store, but at Chronext you will get it the next day as a certified pre-owned watch. Of course at a higher price than the store price, but you can get it right away. Same thing for a Black Panther from Audemars Piguet, we have it in stock. We have managed to combine the practicality of Amazon with a sense of luxury and passion, while respecting the heritage of the watch brands. These very rare iconic pieces can be purchased by our customers for a price.
What are the next steps for Chronext?
We want to accelerate our growth in Europe, where we currently have a physical presence in Germany, Austria, Switzerland, Holland, Italy and the United Kingdom in addition to France, and we are aiming for future openings in Spain, the rest of the Benelux and the Nordic countries. Our online sales are realized in 62 countries. In eight years we have sold more than 125,000 watches for an amount exceeding 500 million Euros, but this is only the beginning. So we want to strengthen our position in Europe, we have good partnerships with market places for the rest of the world, and we are studying the American market for possible acquisitions of local companies.
Auctions have generated more than 500 million this year, do you see a correlation with the second hand market?
Certainly. The two phenomena are related. In the latest Morgan Stanley report, it is suggested that the rise of cryptocurrencies is fueling the demand for watches. A lot of young people are making a lot of money with it, they see AP and Rolex in clips, and want to buy one. Similarly, there is a virtuous circle between auctions and pre-owned watches, which pull each other up. It's a momentum for the watch industry, with a lot of appetite from a growing number of people. The downside is the snatch-and-grab of watches in major cities. Looking on the bright side, we can say that everyone is now interested in watches, which was not the case 20 years ago. Generally speaking, the watch market has grown, which is reflected in CPO sales, which are increasing. In my opinion, it is the appetite for pre-owned watches that is driving the auction business, not the other way around.
